Oil slips amid rising supply

CBS.MarketWatch.com

NEW YORK (CBS.MW) -- Energy futures kept fallingWednesday amid a mostly bearish oil stocks report from the American Petroleum Institute. After the market closed Tuesday, the API reported a 2.203 million-barrel rise in crude oil stocks and a rise of 826,000 barrels in motor gasoline stocks for the week ended March 27. Distillate stocks, however, declined 828,000 barrels, limiting losses in heating oil futures.

Bearish sentiment continues in the energy sector despite plans by OPEC members and non-member nations to reduce oil production. Some analysts said that even after the cut-backs, the market would be saddled with a daily surplus of 900,000 barrels. The next scheduled OPEC meeting is June 24.

Energy futures did find some support from news that Russia is willing to discuss production cuts with OPEC members. Acting First Deputy Prime Minister Boris Nemtsov invited OPEC leaders to talks later this month. Russia is the world's third largest producer of oil. On the New York Mercantile Exchange, May crude oil fell 7 cents to $15.54 per barrel, May unleaded gasoline fell 0.50 cents to 51.18 cents per gallon, and May heating oil lost 0.24 cents to 43.18 cents per gallon.

In other commodities-trading highlights: May copper tumbled 3.9 percent amid a lower-than-expected construction spending report. The Commerce Department said construction spending rose 0.3 percent in February to a record $622 billion annual rate, lower than estimates for a gain of 0.6 percent. Construction spending fell 11 percent in California due to the endless rain showers caused by El Nino.

Copper futures fell despite another decline in supplies. Early Wednesday, the London Metals Exchange reported a decline of 675 metric tons to 339,350 metric tons in exchange warehouses. May copper fell 2.3 cents to 77.55 cents per pound on the Commodities Exchange division of the New York Mercantile Exchange.

Same old story ... June palladium and July platinum found support from an uncertain political situation in Russia as President Boris Yeltsin worked to replace the Cabinet members he fired last week. Russia supplies 60 percent of the world's palladium, 20 percent of platinum, and has yet to ship any white metals this year. June palladium rose $2.30 to $260.50 per ounce and July platinum rose 50 cents to $404.50 per ounce on the Commodities Exchange division of the New York Mercantile Exchange.

May silver fell 2.1 percent, taking back some of Tuesday's profits as U.S. supplies increased. In the latest count, silver stocks in exchange warehouses rose 99,192 ounces to 86,746,209 ounces. A higher U.S. dollar against most major currencies was also bearish for silver, as silver, denominated in dollars, becomes more expensive for overseas traders. May silver fell 13.7 cents to $6.333 per ounce on the Commodities Exchange division of the New York Mercantile Exchange.

May natural gas fell 0.8 percent, retreating from a recent surge in prices, as temperatures returned to normal in both the Midwest and Northeast. Record warm temperatures in recent days had lifted natural gas futures. Traders will look to this afternoon's American Gas Association survey for further guidance. May natural gas fell 2.1 cents to $2.501 per BTU on the New York Mercantile Exchange.

May corn extended its losses, falling 1.7 percent amid talk that the USDA will raise the corn ending stocks estimate in April's supply and demand report. In Tuesday's report, corn stocks were deemed bearish at 4.937 billion bushels, 100 million bushels above most traders expectations. May corn fell 4.4 cents to$2.544 per contract on the Chicago Board of Trade. The Chicago Board of Trade was forced to delay Wednesday's opening trade until 10:15 a.m. central amid technical difficulties with the quotes.

July wheat fell 1.5 percent in bearish follow-through trade. The USDA reported wheat at 1.166 billion bushels in the grain stocks release, higher than traders estimates at 1.142 billion. A bullish spring wheat acreage report was unable to move the market higher. July wheat fell 5 cents to $3.244 per contract on the Chicago Board of Trade

May coffee fell 1.7 percent amid indications that a truckers strike in Colombia may soon be resolved. The strike has limited exports from the port of Buenaventura for the past ten days. May coffee fell 2.5 cents to $1.4375 per pound on the Coffee, Sugar and Cocoa Exchange.

May sugar fell 2.4 percent as rain storms subsided in Brazil, quieting talk of harvest delays. May sugar fell 0.24 cents to 9.95 cents per pound on the Coffee, Sugar and Cocoa Exchange.

April live cattle rose 0.875 to 64.625 cents per pound May feeder cattle rose 1.025 cents to 74.35 cents per pound June live hogs fell 0.45 cents to 59.525 cents per pound May pork bellies fell 0.075 cents to 52.80 cents per pound

Grains/Foods/Fiber

May soybeans fell 1.6 cents to $6.432 per contract May cocoa fell $26 to $1,626 per ton May cotton rose 0.23 cents to 67.46 cents per pound May frozen orange juice fell 2 cents to $1.0205 per pound

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